SENIOR executives of Australia's monopoly wheat exporter, AWB,
discussed paying money to "influential people" in Iraq soon after
the downfall of Saddam Hussein, according to an internal company
document.

The document was revealed yesterday as AWB managing director
Andrew Lindberg faced another grilling at an inquiry into the
company's dealings with Iraq under the corruption-ridden United
Nations oil-for-food scheme.

The inquiry also heard fresh evidence shedding light on the role
of BHP and an associated company in the scandal, with documents
showing the AWB effectively ripped off the UN to retrieve a debt
owed to BHP.

Outside the inquiry, AWB was beset by more turmoil, with another
dive in its share price and a public relations gaffe when it was
forced to withdraw a statement it had released to the stock
exchange defending its actions in Iraq.

Inside the inquiry, Mr Lindberg had his second day in the stand,
this time facing direct questions about whether AWB executives had
discussed the payment of bribes in Iraq.

The document that give rise to the bribery questions  a
report by two senior AWB managers in 2003  points to plans by
the company to resume paying kickbacks to Iraq during the
occupation of the country by allied forces, including
Australia.

The document said Tigris Petroleum, a BHP associate, wanted to
know when it would start receiving payments from AWB and noted:
"They intimated that a number of influential people will need to
start receiving funds and that further delays may cause
difficulties going forward."

Commission of inquiry head Terence Cole, QC, asked Mr Lindberg
whether AWB executives were "addressing the need to pay monies to
Tigris so that a bribe could be paid?" After reading the document,
Mr Lindberg stated: "I don't know what that means."

Pressed by counsel assisting the commission, John Agius, SC, on
whether the words were "code" for a bribe, Mr Lindberg repeated: "I
don't know what it means." Mr Agius then asked him: "Are you the
only one in the room who doesn't know what it means, Mr Lindberg?"
He insisted he did not.

In other developments, the inquiry began detailing a paper trail
showing AWB effectively ripped off the UN to retrieve a
multimillion-dollar debt owed to BHP. AWB collected a $US500,000
($A660,000) fee for its services.

BHP's brief involvement in the wheat trade to Iraq a decade ago,
which it says was a "humanitarian gesture", was explained to the
inquiry as an effort to win petroleum exploration rights in Iraq.
BHP, now BHP Billiton, handed responsibility for the debt to
Tigris, a company set up by former BHP staff. That company engaged
AWB to help it recover the debt for the 20,000-tonne wheat shipment
that was sold to Iraq on credit in 1996  before the UN
oil-for-food program.

Mr Lindberg admitted the company inflated its wheat prices to
recover the $US7.8 million ($A10.4 million) debt owed to BHP and he
informed AWB's board of the move. "I understood that we had
increased the prices of the contract to recover the debt for that
wheat shipment," he said.

Mr Agius detailed an elaborate scheme by AWB to hide the
arrangement.

That involved drawing up a bogus agreement to pay Tigris $US7.8
million  the exact amount of the debt owed to BHP  as a
"commission" for lobbying the Iraqi government to resume its wheat
trade with Australia after the business stalled in 2001.

Mr Agius said his investigators had been unable to find "a
single record spelling out the assistance Tigris provided" to
AWB.

The draft and final agreement documents tendered to the
commission were fake, Mr Agius said. Both he and Mr Cole repeatedly
described the Tigris deal as "a sham".

Mr Lindberg said he could not explain why the Tigris agreement
did not reflect the true arrangement.

In another deal detailed to the commission, AWB inflated wheat
prices it was being paid by the UN so it could pay Iraq for an
apparently bogus compensation claim for contaminated wheat. AWB's
senior managers knew the rebate for the iron powder contamination
was illegal under the UN sanctions in force against Iraq, and
inflating the wheat price to pay the rebate was a way of hiding the
payment, documents tendered to the inquiry show.

Mr Lindberg repeatedly dodged questions from Mr Agius before
finally admitting he agreed to the deal during a dash to Baghdad in
2002 to shore up wheat sales ahead of the US-led invasion of
Iraq.

"They had an expectation that those costs would be paid and the
vessels were discharged on that basis," he said.

Also yesterday, AWB landed itself in hot water at the inquiry
when Mr Agius and Mr Cole seized on a statement AWB issued during
the afternoon to the Australian Stock Exchange.

AWB withdrew the statement soon after Mr Agius began questioning
the truthfulness of its contents.

The statement to the exchange, in Mr Lindberg's name, said: "AWB
itself did not make payments to the Iraqi government" and that "no
one, to our knowledge, can be sure where the money went".

Mr Agius said that statement, and others, could be misleading
because they contradicted evidence given to the commission this
week.

In three days of evidence, the commission has produced
substantial evidence clearly showing AWB management knew its money
was going to the Iraqi government via a Jordanian front company,
Alia.

AWB's share price closed at $6.37 yesterday, down 4 per cent on
Tuesday's close and more than 10 per cent since Friday's close.